THE PAYMENT OF GRATUITY ACT, 1972

1972 · State unknown · central · act_text

Sections (74)

1 · Short title, extent, application and commencement . — (1) This Act may be called the Payment of Gratuity Act, 1972.

1 · [(3A) A shop or establishment to which this Act has become applicable shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below ten.]

2 · Definitions. — In this Act, unless the context otherwise requires, —

3 · [(c) " continuous service " means continuous service as defined in section 2A;]

1 · Ins. by Act 26 of 1984, s. 2 (w.e.f. f. 18 -5 -1984).

3 · Subs. by Act 26 of 1984, s. 3, for clause (c) and the Explanations (w.e.f. 18-5-1984).

1 · [(e) " employee " means any person (other than an apprentice) who is employed for wages , whether the terms of such employment are express or implied, in any kind of work, manual or otherwise, in or in connection with the work of a factory, mine, oilfield, plantation, port, railway company, shop or other establishment to which this Act applies, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity;]

4 · [(k) " notification" means a notification published in the Official Gazette and the expression " notified " shall be construed accordingly];

1 · Subs. by Act 47 of 2009, s. 2, for clause (e) (w.e.f. 3-4-1997).

2 · Subs. by Act 22 of 1987, s. 2, for “and the widow” (w.e.f. 1-10-1987).

3 · . The proviso omitted by s. 2, ibid. (w.e.f. 1-10-1987).

4 · Subs. by Act 12 of 2018, s. 2, for clause (k) (w.e.f. 29-3-2018).

1 · [(r) " superannuation " , in relation to an employee, means the attainment by the employee of such age as is fixed in the contract or conditions of service as the age on the attainment of which the employee shall vacate the employment;]

2 · [2A. Continuous service. — For the purposes of this Act, —

1 · Subs. by Act 25 of 1984, s. 2, for clause (r) (w.e.f. 1-7-1984).

2 · Ins. by Act 26 of 1984, s. 4 (w.e.f. 18-5-1984).

3 · The words "imposing a punishment or penalty or " omitted by Act 22 of 1987, s. 3 (w.e.f. 1-10-1987).

1 · [Explanation. — For the purposes of clause (2), the number of days on which an employee has actually worked under an employer shall include the days on which —

3 · Controlling authority.—The appropriate Government may, by notification, appoint any officer to be a controlling authority, who shall be responsible for the administration of this Act and different controlling authorities may be appointed for different areas.

4 · Payment of gratuity.—(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, —

3 · [Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.]

1 · Explanation inserted by Act 22 of 1987, s. 3 (w.e.f. 1-10-1987).

2 · Subs. by Act 12 of 2018, s. 3 , for "twelve weeks" (w.e.f. 29-3-2018).

3 · Subs. by Act 22 of 1987 , s. 4, for the second proviso (w.e.f. 1-10-1987).

2 · [Explanation . — In the case of a monthly rated employee, the fifteen days ' wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.]

7 · [4A. Compulsory insurance . — (1) With effect from such date as may be notified by the appropriate Government in this behalf, every employer, other than an employer or an establishment belonging to, or under the control of, the Central Government or a State Government, shall, subject to the provisions of sub -section (2), obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer:

1 · Subs. by Act 25 of 1984, s. 3, for “an employee employed in a seasonal establishment” (w.e.f. 1-7-1984).

2 · . Explanation inserted by Act 22 of 1987, s. 4 (w.e.f. 1-10-1987).

3 · Subs. by Act 15 of 2010, s. 2, for “three lakhs and fifty thousand rupees” (w.e.f 24-5-2010).

4 · Subs. by Act 12 of 2018, s. 4, for "ten lakh rupees" (w.e.f. 29-3-2018) .

5 · Subs. by Act 25 of 1984, s. 3, for “shall be wholly forfeited” (w.e.f. 1-7-1984).

6 · Sub -section (7) omitted by Act 34 of 1994, s. 3 (w.e.f 24-5-1994).

7 · Ins. by Act 22 of 1987, s. 5 (w.e.f. 1-10-1987).

5 · Power to exempt.— 1 [(1)] The appropriate Government may, by notification, and subject to such conditions as may be specified in the notification, exempt any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act if, in the opinion of the appropriate Government, the employees in such establishment, factory, mine, oilfield, plantation, port, railway company or shop are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.

2 · [(2) The appropriate Government may, by notification and subject to such conditions as may be specified in the notification, exempt any employee or class of employees employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop to which this Act applies from the operation of the provisions of this Act, if, in the opinion of the appropriate Government, such employee or class of employees are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.]

3 · [(3) A notification issued under sub-section (1) or sub-section (2) may be issued retrospectively a date not earlier than the date of commencement of this Act, but no such notification shall be issued so as to prejudicially affect the interests of any person.]

6 · Nomination. — (1) Each employee, who has completed one year of service, shall make, within such time, in such form and in such manner, as may be prescribed, nomination for the purpose of the second proviso to sub-section (1) of section 4.

1 · Section 5 renumbered as sub -section (1) thereof by Act 26 of 1984, s. 5 (w.e.f. 18-5-1984).

2 · Ins. by s. 5, ibid. (w.e.f. 18-5-1984).

3 · Ins. by Act 22 of 1987, s. 6 (w.e.f. 1-10-1987).

7 · Determination of the amount of gratuity.—(1) A person who is eligible for payment of gratuity under this Act or any person authorised, in writing, to act on his behalf shall send a written application to the employer, within such time and in such form, as may be prescribed, for payment of such gratuity.

1 · [(3) The employer shall arrange to pay the amount of gratuity within thirty days from the date it becomes payable to the person to whom the gratuity is payable.

3 · [(b) Where there is a dispute with regard to any matter or matters specified in clause (a), the employer or employee or any other person raising the dispute may make an application to the controlling authority for deciding the dispute.]

4 · [(c) The controlling authority shall, after due inquiry and after giving the parties to the dispute a reasonable opportunity of being heard, determine the matter or matters in dispute and if, as a result of such inquiry any amount is found to be payable to the employee, the controlling authority shall direct the employer to pay such amount or, as the case may be, such amount as reduced by the amount already deposited by the employer.]

5 · [(d)] The controlling authority shall pay the amount deposited, including the excess amount, if any, deposited by the employer, to the person entitled thereto.

6 · [(e)] As soon as may be after a deposit is made under clause (a), the controlling authority shall pay the amount of the deposit —

1 · Subs. by Act 22 of 1987, s. 7, for sub-section (3) (w.e.f. 1-10-1987).

2 · The Explanation omitted by Act 25 of 1984, s. 4 (w.e.f. 1-7-1984).

3 · Ins. by s. 4, ibid. (w.e.f. 1-7-1984).

4 · Subs. by s. 4, ibid., for clause (c) (w.e.f. 1-7-1984).

5 · Clause (c) re-lettered as clause (d) thereof by s. 4, ibid. (w.e.f. 1-7-1984).

6 · Clause (d) re-lettered as clause (e) thereof by s. 4, ibid. (w.e.f. 1-7-1984).

2 · [Provided further that no appeal by an employer shall be admitted unless at the time of preferring the appeal, the appellant either produces a certificate of the controlling authority to the effect that the appellant has deposited with him an amount equal to the amount of gratuity required to be deposited under sub -section (4), or deposits with the appellate authority such amount.]

3 · [7A. Inspectors.—(1) The appropriate Government may, by notification, appoint as many Inspectors, as it deems fit, for the purposes of this Act.

7B · Powers of Inspectors.—(1) Subject to any rules made by the appropriate Government in this behalf, an Inspector may, for the purpose of ascertaining whether any of the provisions of this Act or the conditions, if any, of any exemption granted thereunder, have been complied with, exercise all or any of the following powers, namely: —

1 · Subs. by Act 25 of 1984 , s. 4, for "nominee" (w.e.f. 1-7-1984).

2 · . The proviso ins . by s. 4 , ibid . (w.e.f. 1-7-1984).

3 · Ins. by s. 5, ibid. (w.e.f. 1-7-1984).

8 · Recovery of gratuity . — If the amount of gratuity payable under this Act is not paid by the employer, within the prescribed time, to the person entitled thereto, the controlling authority shall, on an application made to it in this behalf by the aggrieved person, issue a certificate for that amount to the Collector, who shall recover the same, together with compound interest thereon 1 [at such rate as the Central Government may, by notification, specify], from the date of expiry of the prescribed time, as arrears of land revenue and pay the same to the person entitled thereto:

2 · [Provided that the controlling authority shall, before issuing a certificate under this section, give the employer a reasonable opportunity of showing cause against the issue of such certificate:

9 · Penalties. — (1) Whoever, for the purpose of avoiding any payment to be made by himself under this Act or of enabling any other person to avoid such payment, knowingly makes or causes to be made any false statement or false representation shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to 3 [ten thousand rupees], or with both.

10 · Exemption of employer from liability in certain cases . — Where an employer is charged with an offence punishable under this Act, he shall be entitled, upon complaint duly made by him and on giving to the complainant not less than three clear days' notice in writing of his intention to do so, to have any other person whom he charges as the actual offender brought before the court at the time appointed for

1 · Subs. by Act 22 of 1987, s. 8, for “at the rate of nine per cent. per annum” (w.e.f. 1-10-1987).

2 · The provisos inserted by s. 8, ibid. (w.e.f. 1-10-1987).

3 · Subs. by s. 9, ibid., for “one thousand rupees” (w.e.f. 1-10-1987).

4 · Subs. by s. 9, ibid., for certain words (w.e.f. 1-10-1987).

5 · Subs. by s. 9, ibid ., for "three months" (w.e.f. 1-10-1987).

11 · Cognizance of offences.—(1) No court shall take cognizance of any offence punishable under this Act save on a complaint made by or under the authority of the appropriate Government:

12 · Protection of action taken in good faith . —N —No suit or other legal proceeding shall lie against the controlling authority or any other person in respect of anything which is in good faith done or intended to be done under this Act or any rule or order made thereunder.

13 · Protection of gratuity . —N —No gratuity payable under this Act 2 [and no gratuity payable to an employee employed in any establishment, factory, mine, oilfield, plantation, port, railway company or shop exempted under section 5] shall be liable to attachment in execution of any decree or order of any civil, revenue or criminal court.

14 · Act to override other enactments, etc. — The provisions of this Act or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.

15 · Power to make rules. — (1) The appropriate Government may, by notification, make rules for the purpose of carrying out the provisions of this Act.

1 · Subs. by Act 34 of 1994, s. 4, for “Presidency Magistrate or a Magistrate of the first class” (w.e.f. 24-5-1994).

2 · Ins. by Act 25 of 1984, s. 6 (w.e.f. 1-7-1984).

THE PAYMENT OF GRATUITY ACT, 1972

Sections (74)

Subordinates (0)